On 11 May 2017 Ince & Co held the first of its 2017 Insurance & Reinsurance Law Seminar series for the London market. In light of the cyber-attack on the NHS just a couple of days later, the choice of topic – cyber insurance from a US, European and UK perspective – proved a remarkably prescient one!
In April 2017, a UK government survey revealed that 46% of businesses were aware that they had been the victim of a cyber security breach in the previous 12 months and that the frequency of attacks had increased by 300% in the last 5 years. Noting that cyber risk is an operational, not an IT, issue, Simon Cooper from Ince & Co gave a presentation on the implications of this increasing threat for insureds and their insurers. From an insured’s perspective, it is clear that many businesses struggle to understand whether or not they need cyber cover and, if so, what form it should take. Company directors and compliance officers consider this an overly complex area, with a lack of clarity as to their disclosure obligations at the time of placing, the scope of the cover and what they need to notify and when during the course of the policy. From an insurer’s perspective, Simon noted, the cyber insurance sector has huge potential for growth. There are, however, issues with a lack of reliable data, an ever changing risk profile, the interface between cyber cover and other policies and aggregation.
James Morsch and Teresa Snider from US law firm Butler Rubin Saltarelli & Boyd LLP gave the USA perspective, discussing some cyber insurance cases currently making their way through the American courts.
Kiran Soar ended proceedings with a discussion of two recent and important insurance decisions. He talked through the Supreme Court decision in AIG v Woodman, which dealt with the aggregation of claims under professional indemnity policies but, more broadly, adds to the body of law on the proper approach to aggregation. Kiran also considered the Technology & Construction Court decision in Leeds Beckett University v Travelers as to the meaning of “accidental damage” – a commonly used phrase which, as this case demonstrates, is not entirely straightforward to interpret.
See the ‘Legal Updates’ section of this Blog for further information on these decisions.